There are claims that John 'Goldfinger' Palmer – shot to death at his Essex mansion – was killed because he was going to give evidence against his former accomplices(Reuters file photo)

Convicted gangster John 'Goldfinger' Palmer may have been shot because underworld figures thought he was about to turn supergrass.

Palmer, 64, who once served four years for running a dodgy timeshare business in Spain, was found at his home near Brentwood on 24 June. He had been burning documents in his garden.

Initially police believed Palmer had died of complications following gallbladder surgery, but a post-mortem revealed he had been shot in the chest. The Sunday Times reported police sources believe the killer was a professional hitman who used a specially adapted shotgun fitted with a "silencer" that fired tiny wires which shredded Palmer's organs.

"It's like something Spike Milligan might have come up with," an underworld figure who knew Palmer told The Guardian. "It's like: 'He has been shot in the chest, but foul play is not suspected.'"

Now there are claims Palmer was murdered to stop him giving evidence against other underworld figures. He was due to stand trial in Spain on serious charges including fraud and firearm possession, but for reasons unclear was allowed to return to Britain on bail.

"The people over here feared Palmer was going to turn Queen's evidence to lighten his sentence so they got him out of the way," one underworld figure told the Sunday Times.

Palmer had made plenty of enemies in a rags-to-riches story that began with him selling paraffin off the back of a van at 15 years-old to becoming the 105th operson on the Sunday Times Rich List – equal with the Queen.

Palmer, who left school unable to write or read, owned mansions, a yacht and collection of classic cars, as well as a private jet which he loaned to Kenneth Noyes to fly to Spain when Noyes attempted to evade justice over the 1996 "road rage" stabbing of Stephen Cameron on the M25.

Palmer earned the nickname "Goldfinger" after being a suspect in the 1983 Heathrow Brink's-Mat gold bullion robbery. Palmer admitted melting down gold in his Somerset garden shed, but said he didn't know it came from the robbery and was cleared, blowing kisses to the jury as he was freed.